The Western Union Company Earnings Cheat Sheet: Third Consecutive Quarter of Profit Growth

S&P 500 (NYSE:SPY) component The Western Union Company (NYSE:WU) reported its results for the third quarter. Western Union is engaged in global money transfer and payment services.

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The Western Union Company Earnings Cheat Sheet for the Third Quarter

Results: Net income for The Western Union Company rose to $239.7 million (38 cents per share) vs. $238.4 million (36 cents per share) in the same quarter a year earlier. This marks a rise of 0.5% from the year earlier quarter.

Revenue: Rose 6.1% to $1.41 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: WU reported adjusted net income of 40 cents per share. By that measure, the company beat the mean estimate of 39 cents per share. Analysts were expecting revenue of $1.41 billion.

Quoting Management: Western Union President and Chief Executive Officer Hikmet Ersek commented, “Our business continues to demonstrate its resilience, with revenue growth in each of our major regions and businesses. Consumer-to-consumer trends remained solid, bill payments revenue grew for the second consecutive quarter, and business-to-business payments delivered very strong results, with reported revenue growth of 30%. We are on track to deliver our revenue and earnings per share outlook for the y

Key Stats:

The company has now seen net income rise in three straight quarters. In the second quarter, net income rose 19.1% and in the first quarter, the figure rose 1.1%.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 5 cents in the second quarter, by one cent in the first quarter, and by 3 cents in the fourth quarter of the last fiscal year.

Gross margin shrank 0.1 percentage point to 43.3%. The contraction appeared to be driven by increased costs, which rose 6.3% from the year earlier quarter while revenue rose 6.1%.

The company’s revenue has now risen for two straight quarters. In the second quarter, revenue increased 7.3% to $1.37 billion from the year earlier quarter.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the fourth quarter has moved up from 39 cents a share to 40 cents over the last ninety days. Over the past three months, the average estimate for the fiscal year has climbed from $1.51 per to share to $1.57.

Competitors to Watch: MoneyGram Intl., Inc. (NYSE:MGI), Euronet Worldwide, Inc. (NASDAQ:EEFT), MasterCard Incorporated (NYSE:MA), Wright Express Corporation (NYSE:WXS), Heartland Payment Systems, Inc. (NYSE:HPY), Global Payments Inc. (NYSE:GPN), Newtek Business Services, Inc (NASDAQ:NEWT), FleetCor Tech., Inc. (NYSE:FLT), Green Dot Corporation (NYSE:GDOT), and M & F Worldwide Corp. (NYSE:MFW).

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(Source: Xignite Financials)

 

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